Texas property tax rates have always been skyrocketing and many property owners out there are expecting to see a tax break because of the current economic situation, but sadly it is not on the horizon. With COVID-19 hitting the real estate market, Texans are not likely to see any tax break in 2020. The opportunity to freeze taxes is slim as well. Property owners are left with just one choice, and it is none other than protesting property taxes.
WHY NO TAX BREAKS IN 2020?There are two major reasons.
FILING A PROPERTY TAX APPEALFiling an appeal is the best way to reduce the tax burden and is also your responsibility as a property owner. Pay only your share of the property taxes, not anymore. By appealing your property taxes, you can reduce a significant amount of taxes you owe. Doing this every year helps you save hundreds and thousands of dollars. You can protest your own property taxes for free, or hire a company to do it for you. If you wish to protest on your own, the most important thing you can do is get the HB201 evidence package from the appraisal district. It will include all the details the county appraisal district included in order to come up with their evaluation. Another important note is to ALWAYS bring photos with you to the hearings. The process of protesting can be tedious, it starts off with filing a form with the county appraisal district, you then meet with the CAD and try to resolve the issue. If an agreement is not reached you will have to file a written notice of protest with the ARB. If you don’t agree you can then appeal to the district’s court else opt for binding arbitration or file with the SOAH. If you protest on your own and having a hard time, professional companies, like O’Connor, can do it for you. ENROLL TODAY IN THE PROPERTY TAX PROTECTION PROGRAMYour property taxes will be aggressively appealed every year by the #1 property tax firm in the country. If your taxes are not reduced you PAY NOTHING, and a portion of the tax savings is the only fee you pay when your taxes are reduced! Many FREE benefits come with enrollment. Know more @ https://www.cutmytaxes.com/protesting-property-taxes-during-a-pandemic/
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Most homeowners have the question, “Do I get a tax break on the money I’ve spent?” on their minds when they are fixing up their homes. The answer differs based on the kind of improvements and how well the expenses incurred are tracked. In most cases, the money that is spent on the capital improvements such as adding an additional bathroom or a garage, or a satellite dish helps lower the property tax bill when selling a house. The money that is spent on home improvements can be categorized into two areas, the cost of improvements and the cost of repairs.
The cost of improvements not only includes big items but also includes energy-saving home improvements. These improvements give you tax credits. The cost of repairs is not added to the basic cost. As per the IRS from the year 2018 to 2021 individuals can claim credits for the below:
Taxable home improvements Not all the improvements you do for your house are considered home improvement. The IRS looks at it differently. According to the IRS, the capital improvements made to a property must last for more than a year and must add value to your residential property and increase its life. Capital improvements can include constructing a new bathroom. Refer to the IRS Publication 523 to check out what items qualify. However, there are limitations. The improvements made should be evident during the sale. Let us say you had made improvements to your home 7 years back by installing wall-to-wall carpeting. 5 years later you change it to a hardwood floor. At present, the wall-to-wall carpeting cannot be considered as a capital improvement. According to the IRS, repairs refer to those things that are done to maintain the good condition of a house and do not add value to the property or increase its life. How do home improvements affect your property tax bill? To know how home improvements affect your tax bill, it is important to know your cost basis. The cost basis is simply the amount of money you spend to build your house including costs such as your lawyer fee, survey charge, home inspection, etc. then add all the money spent for your property’s capital improvements. Let’s understand it better with an example: Say if you are single, you get an exemption on the profit of 180,000. If you had not considered the money you spent on remodeling, then your tax bill would have included 35,000 as well. Hence, keeping the receipts and adjusting the cost basis help you save! Property tax assessments for homes were increased by 8.8% for the tax year 2021, based on a review of 232,363 homes valued by Harris Appraisal District. Homes valued between 300K to 500K had the largest increases, average 9.7% higher than 2020.
Review of 232,363 homes valued at $300,000 or indicates an increase in assessed value of $127.8 billion, up 8.14% from $138.2 billion in 2021. Total property taxes for 2021 for homes valued over $300,000 would total $3,801.0 million, based on a 2.7% tax rate before considering homestead exemptions. Harris has 26,247 homes valued at $1 million or higher. They are valued at $45.6 billion in 2021, up from $42.5 billion in 2020. Values were increased for 20,831 homes, reduced for 3,024 homes, and remained flat for 2,392 homes. Homes valued at $300,000 to 500,000 increased from $49.9 billion in 2020 to $54.5billion in 2021, an 9.2% increase. Of the 148,286 in this price range, values were increased for 127,494, reduced for 11,663 and remained flat for 9,128. Luxury homes valued at $500,000 to $1,000,000 rose to $38 billion in 2021 from $35.3 billion in 2020, a 7.4% increase. This group of homes had the smallest level of increase, but still a sizable increase. Most homes in this price range saw an increase in the property tax assessment. Of 57,856 homes valued at $500,000 to $1,000,000, 46,512 were increased in tax assessment, 6,473 were reduced and 4,868 did not change. Harris County homeowners are encouraged to protest their property tax assessment, regardless of whether it was increased, reduced, or remained flat. Harris Appraisal District has limited staff to value well over 200,000 homes in Harris County. Homes are valued using the cost approach. The only option for quality control is a property tax protest. Otherwise, Harris Appraisal District staff is highly unlikely to review the estimate of value generated by their computers. There is no risk to appealing. The appraisal district and appraisal review board may not increase the assessed value due to an appeal. The only options are to reduce it or leave it the same. 85% of homeowners who appealed in 2019 were successful in reducing their property tax assessment. The property tax appeal deadline is Monday, May 17th. Yes, you read it right! Texans can expect to see a lower tax bill in 2022. This could be the result of the tough political climate. According to Senator Paul Bettencourt, the value of a house that is around $300,000 will be able to save around $200 in 2022, according to Bettencourt’s office, no matter the property tax rate varies in each school district across Texas.
BUT HOW?The money from the state tax surplus will help in reducing the 2022 Texas property tax bill. With that being said, a minimum of at least $2 billion is being expected to be sent to the independent school districts in Texas. The county appraisal districts are expected to reduce the property tax rates for homeowners by 3.3 cents which in turn will help Texans save on their property tax bills. WHY IS IT HAPPENING?During the last week of September, Governor Abbott added property tax relief to the agenda. As per the information from Texas Tribune, Governor Greg Abbott is said to be facing pressure to pay more attention towards property tax relief. If the Texas economy sees growth by the month of June, then a median homeowner is expected to at least see a minimum of $300 in tax savings! To get more property tax reductions for your residential property reach out to O’Connor’s property tax protection program. Yes, O’Connor CAN help you reduce your property taxes! Know more @ https://www.cutmytaxes.com/ Property tax assessments for homes were increased by 22% for the tax year 2021, based on a review of 104,838 homes valued by Williamson Appraisal District. Homes valued between $500K to $1 million had the largest increases, average 22.2% higher than 2020.
Review of 104,838 homes valued at $300,000 or indicates an increase in assessed value of $37.2 billion, up 16.5% from $43.35 billion in 2021. Total property taxes for 2021 for homes valued over $300,000 would total $1266.5 million, based on a 2.7% tax rate before considering homestead exemptions. Williamson has 1,224 homes valued at $1 million or higher. They are valued at $1.2 billion in 2021, up from $1 billion in 2020. Values were increased for 1,148 homes, reduced for 76 homes, and remained flat for 0 homes. Homes valued at $300,000 to 500,000 increased from $24.50 billion in 2020 to $28.60 billion in 2021, an 16.7% increase. Of the 79,781 in this price range, values were increased for 78,880, reduced for 901, and remained flat for 0. Luxury homes valued at $500,000 to $1,000,000 rose to $13.5 billion in 2021 from $11.6 billion in 2020, a 15.7% increase. This group of homes had the smallest level of increase, but still a sizable increase. Most homes in this price range saw an increase in the property tax assessment. Of 23,833 homes valued at $500,000 to $1,000,000, 23,516 were increased in tax assessment, 316 were reduced and 1 did not change. Williamson County homeowners are encouraged to protest their property tax assessment, regardless of whether it was increased, reduced, or remained flat. Williamson Appraisal District has limited staff to value well over 200,000 homes in Williamson County. Homes are valued using the cost approach. The only option for quality control is a property tax protest. Otherwise, Williamson Appraisal District staff is highly unlikely to review the estimate of value generated by their computers. There is no risk to appealing. The appraisal district and appraisal review board may not increase the assessed value due to an appeal. The only options are to reduce it or leave it the same. 85% of homeowners who appealed in 2019 were successful in reducing their property tax assessment. The property tax appeal deadline is Monday, May 17th. Read here 2021 is already here and property owners are thinking about how much tax they should pay this year. Every year the tax rate keeps on increasing a certain amount and that happens due to many reasons. Are you eager to find what increases property taxes? Then here is the list of 5 factors that are the reason for the tax hike.
5 FACTORS THAT HIKE PROPERTY TAXES!STATE AND CITY BUDGETSThe pandemic that toiled the whole world is now moving towards the budget cuts of states and cities. The pandemic has caused an enormous plunge in economical status and that is alarming to increase the state and city budget cuts. Because of the pandemic, the state and local governments are finding it hard to manage the budget expenses, and to overcome this scenario rate of property taxes can be increased. MORE FUNDS TO PUBLICPublic benefits are completely spent from the money that is collected from taxpayers. Since the pandemic has caused a lot of precautionary measures, huge funding has been spent on the public benefits which can also be one of the reasons. ALTERED PROPERTYIf you have recently altered your property or added any extra investments to it, there are chances for a hike in your tax bill. When property improvements happen, they most likely add value to the property, which then leads to higher taxes. ERROR ALERTAn infinite number of tax bills are sent out of the assessor’s office on daily basis. There are chances for human errors to happen and that’s why you always need to check it with tax reduction experts who are pros in the field. The tax reduction experts help in cross verifying your tax bill and that might help you to reduce the tax bill if errors were found. PROPERTY LOCATIONThe location where the property is situated stands as the deciding authority of the taxes. If your property is in the center of the city then it’s highly likely that your tax bill is going to have more digits in it. So, location is also a factor for increased tax bills. HOW TO REDUCE PROPERTY TAXES?Planning to reduce taxes? Then O’Connor is here to help you with tax reduction. O’Connor has 40+ such licensed property tax consultants, most with 10+ years of property tax consulting experience. O’Connor consultants master the prerequisite technical skills, develop close relationships with appraisal district staff, and are supported by a team of 30 IT professionals with access to a national database and proprietary valuation and tax appeal software. The results are extraordinary. No one else matches O’Connor’s aggressive approach at the administrative appeal level and for coordinating judicial appeals. Know more @ https://www.cutmytaxes.com/ Property tax assessments for homes were increased by 22.6% for the tax year 2021, based on a review of 208,190 homes valued by Travis Appraisal District. Homes valued at $1 million or higher had the largest increases, average 27.5% higher than 2020.
Review of 208,190 homes valued at $300,000 or indicates an increase in assessed value of $105.05 billion, up 15.07% from 120.89 billion in 2021. Total property taxes for 2021 for homes valued over $300,000 would total $3,558.6 million, based on a 2.7% tax rate before considering homestead exemptions. Travis has 22,540 homes valued at $1 million or higher. They are valued at $33.5 billion in 2021, up from $28.9 billion in 2020. Values were increased for 21,351 homes, reduced for 1,067 homes, and remained flat for 122 homes. Homes valued at $300,000 to 500,000 increased from $34.97 billion in 2020 to $40.38 billion in 2021, an 15.4% increase. Of the 110,837 in this price range, values were increased for 108,008, reduced for 2,673, and remained flat for 154. Luxury homes valued at $500,000 to $1,000,000 rose to $50.6 billion in 2021 from $41.5 billion in 2020, a 21.7% increase. This group of homes had the smallest level of increase, but still a sizable increase. Most homes in this price range saw an increase in the property tax assessment. Of 74,814 homes valued at $500,000 to $1,000,000, 72,817 were increased in tax assessment, 1,873 were reduced and 124 did not change. Travis County homeowners are encouraged to protest their property tax assessment, regardless of whether it was increased, reduced, or remained flat. Travis Appraisal District has limited staff to value well over 200,000 homes in Travis County. Homes are valued using the cost approach. The only option for quality control is a property tax protest. Otherwise, Travis Appraisal District staff is highly unlikely to review the estimate of value generated by their computers. There is no risk to appealing. The appraisal district and appraisal review board may not increase the assessed value due to an appeal. The only options are to reduce it or leave it the same. 85% of homeowners who appealed in 2019 were successful in reducing their property tax assessment. The property tax appeal deadline is Monday, May 17th. Companies that operate in the United States or companies that have tangible business personal property in the state must pay annual property tax returns. These returns include listing the year the BPP was acquired and the first cost of the asset. Many people are not aware of the fact that taxes on business assets are paid every year as long as the asset is in use apart from the company’s book depreciation. The local taxing authorities have the right to decide on the value of the property tax return. The value depends on the assets category and the local taxing authorities’ depreciation schedule. The return is assessed a taxable value which is later applied to the tax rates specific to the street address in order to result in an annual BPP tax due. Now that we have got an overview of tangible personal properties let us take a look at the top five mistakes property taxpayers should avoid.
Top five mistakes property taxpayers should avoidFiling a property tax return starts off with a company’s fixed asset listing. This means the assets that are physically located as of this date should be listed for the returns. There are a lot of difficulties that could be experienced. However, here are a few common mistakes that a filer can avoid. GHOST ASSETSGhost assets generally refer to those assets that are shown in the company’s asset listing but are not really physically present. Ghost assets if not removed from the fixed asset register can result in additional property taxes. Another point to remember is the equipment on return does not depreciate completely but only up to a certain level which is applied as long as the asset is in its location. This means even if the asset has dollar zero as the book value, the asset will always have a value for property taxes in the eye of an assessor; hence you will always have to pay property tax on the asset. It is always good to start off by reviewing the top dollar assets based on the first cost and old assets based on the year it was acquired. ASSET CLASSIFICATIONAssets listed on the tax return are to be listed below a particular category as per the instruction of the assessor. At times, tax filers completely rely on the category from the fixed asset listing. But, by doing it that way, there are chances for mistakes. When an improper depreciation schedule is applied it might result in errors in the value of the asset. For an equitable valuation, it is necessary to cross-check if the assets are properly classified as per that particular category’s depreciation table. Some special categories to evaluate are R&D equipment, high-tech equipment, manufacturing machinery, etc. NON-TAXABLEIf the equipment is to be directly listed from the register, there comes the risk of overstating the value and hence the property taxes. A property tax return provides most of the information with regards to what and where to list on the return. Online tools provide an additional layer of security confirming what is taxable and what is not. It is important to understand the difference between a non-taxable property and an exempt property. A non-taxable property is one that is not taxable by nature whereas an exempt property is something that is taxable by nature but tax exemptions exist based on certain qualifications. One such example is a freeport inventory. A few states tax inventory and in these states a freeport exemption is likely to be offered. This exemption could either exempt all or a certain amount of the qualifying property. Taking Texas for an example, if an inventory comes into Texas and moves out within 175 days then the inventory might receive exemptions. If the company has a distribution center in the state then this helps in reducing the tax liability. COST BASISOn the majority, most property tax returns state cost first. However, few jurisdictions utilize book value first. There is a common misconception that book value is the go-to value but assets are valued by the assessors based on the first cost multiplied with the depreciation factor specific to that asset in most jurisdictions. REAL OR PERSONALOne of the major mistakes is not to review a fixed asset listing for real vs personal property. Real property includes land and building whereas personal property includes all tangible assets. Assessors value real property through 3 approaches. Personal property is required to be listed every year. However, it is not the same for a real estate listing. Reviewing the asset classification is considered a proven method to reduce the potential of over-assessment. Always review your property tax bills and make sure the values are consistent. O’Connor’s team of professionals possesses the resources and unparalleled market expertise in the areas of property tax, cost segregation, and commercial and residential real estate appraisals. Know more @ https://www.cutmytaxes.com/ |
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